PGA Tour getting up to $3B infusion
The future of professional golf is beginning to take shape.
On Wednesday morning, PGA Tour Commissioner Jay Monahan announced to players that the Strategic Sports Group (SSG), an outside investment group headlined by Fenway Sports Group and comprised of several high-level U.S.-based sports owners, has partnered with the tour to create PGA Tour Enterprises.
“Today marks an important moment for the PGA Tour and fans of golf across the world,” Monahan said in a statement.” By making PGA Tour members owners of their league, we strengthen the collective investment of our players in the success of the PGA Tour. Fans win when we all work to deliver the best in sports entertainment and return the focus to the incredible – and unmatched – competitive atmosphere created by our players, tournaments and partners.
“And partnering with SSG – a group with extensive experience and investment across sports, media and entertainment – will enhance our organization’s ability to make the sport more rewarding for players, tournaments, fans and partners.”
The SSG will invest up to $3 billion, with an initial investment of $1.5 billion.
The player grants will vest over time and will be based on career accomplishments, recent achievements, etc. Only qualified PGA Tour players are eligible.
A statement released Wednesday morning said that “nearly 200 PGA Tour members will have the opportunity to become equity holders” in the new for-profit entity. PGA Tour Enterprises “is also considering participation by future PGA Tour players that would allow them to benefit from the business’s commercial growth,” meaning players who return from LIV Golf or make it to the tour from college will have access once they regain membership.
“We greatly appreciate the opportunity to join PGA Tour players in this important next phase of the PGA Tour’s evolution,” said John Henry, principal owner of Fenway Sports Group and manager of the Strategic Sports Group. “Our enthusiasm for this new venture stems from a very deep respect for this remarkable game and a firm belief in the expansive growth potential of the PGA Tour. We are proud to partner with this historic institution and are eager to work with the PGA Tour and its many members to grow and strengthen the game of golf globally.”
The release also stated that PGA Tour Enterprises allows for a co-investment from the PIF in the future, “subject to all necessary regulatory approvals.”
On June 6, 2023, the PGA Tour announced a framework agreement with the DP World Tour and Saudi Arabia’s Public Investment Fund to create a forprofit golf entity known as PGA Tour Enterprises. Four months later, the PGA Tour’s policy board announced it had advanced discussions with the SSG and that it had not shut the door on the PIF.
The Dec. 31 deadline to come to a definitive agreement with the PIF was extended, and Monahan sent a memo to players that stated “active and productive” negotiations would continue into 2024 with the PIF based on the progress made to date. Monahan and Al-Rumayyan reportedly met last week in Saudi Arabia to continue negotiations.
Why bring in outside investors if talks with the PIF are continuing? One could argue that bringing in the SSG would dilute the Saudi investment and make the deal more palatable given the U.S. government’s various questions. On the flip side, such a move might be seen as a way for the PGA Tour to have its cake and eat it, too, by pushing the Saudis out after ending the litigation with the framework agreement. The former seems more realistic and would be a step toward reuniting the game, while the latter would be another pivot from the tour that would only lead to more battles with LIV.